if you fast, you will not lose much fat, mostly just muscle and you may stand on the scale and be happy with the result but in fact most of the weight lost will be water loss due to dehydration (much of water comes from food) so you are not loosing fat, mostly just water.
So do excersize and remember that the more intense the excersize is the better. Some people will tell you at high intensity you burn carbohydrate at low intensity fat, so work at low intensity.
Although the first statment was true, even tohu the ratios change hugely, because the energy increase is so great that oyu still burn more fat at high intensity then low intensity.
Do not starve yourself, after hard excersize you need carbohydrates, just eat low fat foods with high carbs (depends how much excersize you do)
you cna eat bread and pasta (wholemeal is better) as well as potatoes. Fruit is also a good source. Watch out for food with high fat content.
Personaly i make sure i have some fat on me, i have a BF% of 12-13 and would not let uit go any lower then 9-10 under any circumstances because even thou loosing weight boosts your VO2 max (maximum aerobic capacity)per kg of body weight, because the vo2 max stays the same as the wieght decreases. But muslces store only, i think it is 3000 calories of glycogen, with training it increases, but it is not enough for hard rides. Fat stores can be infinite, having a fair bit of fat rtaher then being realy skinny means i have a reserve of somthing like 10,000-15,000 calories to get me through the ride, even thou at this point i will anyway be shatered.
if you want to try and excersize and not eat, let me tell you a little stroy of what happened to me. I was not trying to loose weight, i was just bieng stupid and thought i would eat when i get back. It was a 45km ride at a hard pace. I was doing great for about 33km, i thought i might even brake my best record time. Then I got really weak with in a fre hundred meters, not only did my glycogen suplies run short buy my blood sugar levle plumpted. By chance it happened to be the dya that i had run out of glycogen sports drink so only had water with me. To cut a long story short, i was in such a state that at one point a stumbled off my bike and passed out. I learnt my lesson.